Zappy trails: Cheaper loans to roll in for electric vehicles

Hundreds of Australian motorists will be able to access cheaper loans for electric vehicles as part of a $20.5 million investment by the Clean Energy Finance Corporation.

Nov 28, 2022, updated Nov 28, 2022
 (Reuters pic).

(Reuters pic).

The cash injection, announced on Monday, will be used to fund more than $100 million of loans on battery electric and plug-in hybrid vehicles through Taurus Motor Finance.

The discounted offers could see car buyers save hundreds of dollars over the course of a loan for vehicles priced under $90,000.

The announcement comes just days after tax cuts were approved to lower the price of some electric vehicles in a deal between the Albanese government, the Greens and Senator David Pocock, and weeks after the National Electric Vehicle Strategy consultation paper received more than 500 submissions.

The latest investment will see motorists offered loans at a discounted rate that could see them save $1300 over a seven-year loan for a $48,000 vehicle.

Federal Energy Minister Chris Bowen said the investment was designed to lower the initial cost of electric vehicles so Australian drivers could unlock cheaper overall transport costs and reduce their emissions.

“Electric vehicles are cleaner and cheaper to run but Australians are missing out on these benefits because of the price,” he said.

“Cheaper loans supported by CEFC finance are a strong incentive for them to buy EVs and will help decarbonise the transport sector.”

The price of new battery electric vehicles remains high in Australia compared to the rest of the world, with the cheapest models available for about $46,000. An entry-level Tesla costs $65,500 while a Polestar costs $67,000.

Clean Energy Finance Corporation debt markets head Richard Lovell said the loan investment was designed to give motorists a “powerful incentive” to invest in electric vehicles and give manufacturers more confidence to launch vehicles in the Australian market.

“At least half of all car buyers in Australia finance the purchase with a car loan,” Mr Lovell said.

“Working with Taurus to establish a new green car loan has the potential to improve EV availability because it offers original equipment manufacturers the certainty that potential customers can access finance to buy their cars.”

Taurus Motor Finance has yet to unveil details of the new loans, though founders David Giffin and Satyajit Pal said they were working “to accelerate the transition” to electric vehicles with EV Direct, which distributes the BYD Atto 3 in Australia.

EV Direct chief executive Luke Todd said the initial price of vehicles remained “one of the biggest barriers to EV uptake in Australia”, and the company would support the new loan scheme.

More than 20 banking and finance companies also offer discounted rates for the purchase of electric vehicles in Australia, including Westpac, Macquarie and Bank Australia, which this year announced it would stop financing loans for petrol, diesel and hybrid vehicles from 2025.

Electric vehicles accounted for just 3.39 per cent of new vehicles sales in Australia until September 2022, according to the EV Council, representing a 65 per cent increase from 2021.

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